Concluding that “that true disruptive innovation is almost impossible within the framework of legacy carriers,” Ty Sagalow, formerly president of product development at AIG, has joined Lemonade, a startup that says its peer-to-peer technology will revolutionize the insurance business.

Sagalow will serve as chief insurance officer for the nascent company, which plans to launch in the first half of the year under founders Daniel Schreiber and Shai Wininger, with financial backing from Aleph and Sequoia Capital. Other insurance executives signing on include Robert Giurlando, previously SVP and chief underwriting officer at ACE, who is Lemonade’s chief underwriting officer; James Hageman, who left his job as SVP of claims at ACE to become the startup’s chief claims officer; and Ron Topping, who also is an AIG vet and is now Lemonade’s CFO.

Schrieber says that legacy insurance expertise is needed because Lemonade is a true insurance carrier, and will employ the same kind of underwriting and actuarial staff that a traditional insurer does.

“We’ve assembled an all-star team, and Ty is overseeing that group,” Schrieber says. “We’ve got people really rooted in how to bring these disciplines to bear – we just have actuarial models, for example, that are different” from traditional carriers, he adds.

The major difference, Schrieber says, is that Lemonade is not a “large, bureaucratic” company like venerable insurance institutions.

“In the early 1900s, when you were building a company, the large bureaucratic model was the best model we had. What we’ve seen in the past 10 years is that the thinking and mindsets of the sharing company can provide superior customer experience,” he explains. “We don’t believe that you can really change insurance in a profound way without dealing with that plumbing.”

For the moment, Schrieber and Lemonade are tight-lipped about the specifics of their technology platform and model – other than to say that it’s a mobile-first experience that combines software with the crowd, similar to how Uber upended the car-for-hire industry or AirBnB did the same for hospitality. His co-founder, Shai Wininger, applied the same thinking to freelancing with the startup Fiverr.

“AirBnB and Uber have found a way to centralize and replace bureaucracy with technology and the cloud,” he says.  “And our insurance experience is countered by people who come out of the consumer experience or online experience world, with a focus on design, instantneousness and delightfulness of experience. We want to re-architect the basic incentives, structures and motivations of the players with different fee structures and crowd involvement.”

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